tv Street Signs CNBC November 8, 2012 2:00pm-3:00pm EST
meantime, that's all for "power lunch." >> we'll see you tomorrow. have a great afternoon, everybody. "street signs" begins right now. welcome to "street signs." where, yes, the election is still over, but what's it going to take to get you interested in stocks again? well, probably not higher taxes. one company making a first strike against higher dividend tax rates. we'll tell you who and why. speaking of taxes, good-bye l.a., hello dallas. california hiking taxes on the rich. are we about to see a big-time golden state good-bye? and is black friday dead? put down that turkey leg, america. wait until you hear what the world's biggest retailer is planning. >> let's get down to business. as of now the dow and s&p is seeing their biggest two-day drops in about a year, folks. at current levels the major averages would all close at their lowest in about at least
three months with the s&p briefly lost its double-digit percentage gain for the year which is currently hovering around that 10% mark. if you are looking for a bright spot, the nasdaq is still solidly in double digit territory for the year so far. bob pisani is down on the floor of the nyse. bob, new day, same problems worrying investors and the biggest bug there on the street these days seems to be fiscal cliff anxiety. is it rational? >> yeah. it's rational. i'm hopeful a deal can be made but it is rational to worry about it now that the election is over. one uncertainty down, now a new one out there. i'll outline the concerns. i think this is what's moving stocks in the last couple of days. we are seeing some people selling on fears of higher capital gains tax that's out there. that some deal, whatever it is, is going to matter. is it rational? yes. likely to go to at least 20% but 40% like i hear some people talking about? i don't think so. others i've talked to are taking these high-beta risk stocks down
a little bit to protect the gains that they've had on the year. they've had nice gains. they dodged the headline risk associated with the fiscal cliff. look at particularly the leadership in some of the big tech names that have had nice gains this year, including apple. look, apple down another 2%. remember apple was $411 when it started. $411 started this year. big gains still locked up in apple. finally, you think the fiscal cliff matters? look at leggett&platt. bottom line is, it is already affecting the behavior of the market. >> bob pisani, thank you. herb greenberg just got his time cut by two minutes. you can't use presidential uncertainty as a reason not to own stocks any longer. but you can say you are freaked out about the fiscal cliff,
higher dividend or capital gains tax rates or maybe even greece. but are these really reasons not to own stocks? let's bring in craig hodges, co-portfolio manager of the hodges fund, as well as peter tuse. if capital gains rates go up in january, why wouldn't i buy stocks aggressivelily now and sell toward the end of the year? why sell now? >> there's a lot of cross currents. people are positioning. i think that's what you're seeing in the market, is people positioning for i guess the new world and it is likely that the -- that capital gains and dividend taxes are going to go up. we've talked at the hodges funds to several of our companies and a lot of them are actually having special meetings between now. a lot of them schedule them for right after the election to actually have a dividend strategy for the remainder of the year. if you're sitting on a lot of
cash and you eventually want to return it to shareholders between now and december 31st is the time to do that. i think you'll see a lot of special dividends between now an year end. but i'm not one of these people that's thinking it is going to be a really catastrophic rise in taxes. i think you might get the capital gains up in the 25% range and maybe the dividends in the 20% range. that's not going to help, but i don't think it will be catastrophic. >> what are the reasons for someone who actually owns stocks right now in this so-called new world that you've got then, craig? what's going to get people invested and interested again in stocks? >> that's a great question. i don't know what's going to get people interested again in stocks. people have been selling stocks for four solid years. yet the markets have gone up in the face of that. stocks are cheap. if you're looking out a ways, i do think that businesses are still good. this is still the best place to invest, we feel. a lot of the companies we're talking to have a lot of cash.
revenues are tough and we do have headwinds but we're not talking about high multiples on these things. you can buy a lot of stocks trading below their growth rates and the hodges small cap fund we have several companies that we can buy at ten times earnings that are growing their earnings at 20%. the values are there. >> peter, i don't know if you're like me and love this country so i have an eagle feather pillow. all right? i don't know if you're wearing an american flag pin. make the case for america still being the best place to invest in equities. >> as craig said, we are still finding lots of growth opportunities in the companies we've invested in this our mid cap fund. scripps network, power services, symbol pwr, companies growing in the 10% to 20% range, plenty of business. i think in a world where you might face higher dividend taxes, people are going to look for companies that can generate capital gains and a lot of the
smaller, faster growing non-dividend paying companies might attract investor interest. i still think we have the best economy in the world. obviously we were going through a slow patch but we will hopefully solve that slow patch and you'll see growth accelerate into next year after some solution is reached. >> peter, we just put up a board there of some of your top holdings in your fund which by wait is up 8% year to date. what great buying opportunities have been unearthed in the selling that we've seen the last couple of days? >> well, two stocks we bought very recently. one in our large cap -- one in our mid cap portfolio. elizabeth arden, the perfume company, coming out with fragrances branded in the taylor swift, justin bieber name. again, 20% growth. reasonable pe to growth rate. our stocks tend to hold up well in falling markets. we use a combination of fundamentals and technicals. and when we see a stock that's
held up well in this kind of market, it's a good sign to us that business at that company is really strong and it is something you should look at. >> "street signs," the glass half full kind of show, craig. but what if we don't get a fiscal cliff resolution? do you dump everything? leave? run? set things on fire? >> no. you got to stay invested. the general public has left this market and there's so much money that are in bonds and bond funds, earning 1%. as soon as we get rates coming back up -- which i don't know when that is. but as soon as that happens you'll see a flood back in to dividend paying stocks, i believe, in order to get yield and i think you will see a rush back into the market. most likely i don't think any of these solutions are going to happen quickly. so i would just look at high-quality names. we love housing stocks. we're in the early stages of that. companies like texas industries, eagle materials in the cement business. they have very, very limited
co-xico competition. they make copper wire. even the energy space. obama isn't known for his love of energy but i think everyone is starting to agree that a real economic boost for this nation could be a domestic energy policy and us being -- get tlag going with natural gas and more drilling here. energy's one of the favorite areas in the hodges small cap fund. >> then go fill up a cracker barrel. thank you both. >> small cap fund is up by 16% year to date. we've been asking you on twitter -- now that the election is over, what's it going to take to get you interested in owning stocks again? here are some of your responses. clarity in the tax code. dividend stocks are likely to get a lot less attractive. >> business and stock ownership is still the best way to build
growth in america. another said ask me again in four years. answer now is nothing. >> i still remain more worried about europe than the fiscal cliff. on deck -- tax hike? yes, please. california voters say yeah to higher taxes. but are they also about ready to say yes to max exodus to texas? maybe even sydney. later on, contact high. is it high time for yaall state to just say yes to legalized pot? the map that will have your head spinning. next. ♪ i'm the tax man i'm freaking out man.
it sounds like a wig dose of hopium for anyone trying to sell their house. prices are spiking but there is a big caveat. diana olick is on it. what is this? >> mandy, one word. investors. realtors just reported the median home price in the u.s. rose 7.6% from a year ago. other reports show smaller price gains. prices up just 2% year over year for the nation's top 20 markets. others show prices up nationally from 3% to 5%. the realtors' number is so high because they use a median price comparison. that means half the homes sold for more and half for less. when all the action in the market is on the low end, i.e. investors buying foreclosures, the median price skews lower. what's happening now is that investors can't find enough
distressed homes to buy because of all the bank delays and loan modifications. the numb berp er of homes in th foreclosure process hasn't moved. investors are suddenly a smaller share of the market. in fact, down to 23% from 30% last year. the median price skews higher. if you followed all that, you want to know is your home gaining value. right now as we speak, probably. but it depends more than ever now where you live and if investors are heavy into your neighborhood. guys? >> all right, diana. thank you very much. well, californians say yes to more taxes. residents of the golden state approve a tax hike on families making more than $250,000 a year but a sales tax hike will also impact everyone in that state. given that the top 1% of residents already bring in 40% of tax revenues, could this cause an exodus out of state.
communications consultant for the california republican party is here. mark, i guarantee you everybody is thinking this is just crying wolf, nobody's going anywhere. >> i wish that were the case but frankly our statistics are showing that california's bleeding high-income wage earners at the rate of 2,000 per week. a lot of that is because we're frankly at the bottom of every single leading economic indicator in business model and i think we've gotten to the point right now by jacking up these taxes even more, it just gives people the final excuse to say i think idaho's looking pretty good these days. >> 2,000 a week? that's incredible. all these high earners leaving the state, who's left to generate the revenue? >> there was a democratic -- i believe a pollster out there saying really all that's left are the very rich, very poor and public union workers who are obviously part of the government that's taking advantage of a lot of power out here these days. it gives them the opportunity to raise taxes without any kind of blowback whatsoever.
>> this really isn't solving anything then. >> no. and i think that the other thing we need to keep in mind is on top of passing prop 30 -- which by the way, california voters turned down the last eight tax hike proposals. this time because the governor pushed the fact he was going to save the schools, democrats looked like they'll reach a super majority in both houses which means they have the power to increase taxes but override government and governor vetoes. >> didn't californians, of which i am one, born and raised in l.a., my parents left in the mid '80s, along with millions of others, didn't they screw themselves with prop 13? >> i think prop 13 at the time was necessary and it still continues to be a real point of contention with a lot of folks out here. i don't think so. i think prop 13 is still a salvation for a lot of homeowners out there that frankly when you look at the housing boom of the middle 2000s, there's a lot of people that wouldn't have been able to afford their taxes when they had
their property values almost double. it kept a lot of people in those homes. i think though that with the super majority there's going to be at least an attack on prop 13 from a two-tier aspect which means they'll leave the property values alone but they'll go after the commercial real estate. >> let's get a little bit more macro here. what are the national implications of this and could we see many more than 2000 a week leaving the country? >> well, i'd have to say that as long as there are other states out there like texas and north carolina, idaho and nevada that either have no state income tax or very low income tax, i think the migration is just going to be probably from state to state as business owners and entrepreneurs find more opportunities in states that aren't going to be as punitive. but i think it is a lesson for everybody, that as california goes, so does the rest of the nation. as we head off that fiscal cliff before you guys to, hopefully you'll not dragged down by the same pulley rope. >> just to follow up on mandy's point -- listen, you're not going to leave the country but
where are you going to go? california's playing, hey, everybody's going to raise their taxes, it is a nice place to live. if the president gets his way with the budget, families making over $390,000 a year are going to be paying 51% nin come tax -- just income. not even payroll on that above $390,000. it will of course affect downward deductions. but if there is nowhere else to go, there's nowhere else to go! >> i think you've actually put in just encapsulated the problem our nation is facing over the next four years with another obama administration. i think that that's one of the things we're going to have to take a good lard look at. do we continue to try to put the burden of trying to pay for an increasingly large government on the backs of people who are less and less likely to be able to provide that extra revenue. i think that that's a really big problem for our country to try to discuss and determine over the next four years. >> we're going to say good-bye, mark. but stay patched in for 30
seconds because you're going to want to hear this. all right? it's very unscientific, america. but one sign that people may be leaving california like my folks did 20 years ago, rental van costs. i just looked it up. a one-way 14-foot u-haul from l.a. to dallas, texas, $1,238. the same truck from dallas to l.a. -- $837. the truck leaving from california, 32% more. what does that possibly say about where the demand is, mandy? >> i think it is a very clear message. bertha coombs has a quick "market flash." what are you watching? >> mandy, carl icahn is sending a message to shareholders of oshkosh. he says the board there is obfuscating his message. he says he does not want to take the company private. he has a tendered offer he has extended. he is the biggest shareholders. he's offering shareholders $32.50 saying surrender your shares to me. he wants to kick out management because he thinks they're not doing a good job or install his own slate of directors.
the company says carl icahn's offer is not good for shareholders so the debate continues. nonetheless, stock today is off the market, 2.7%. next up, another good reason to keep popping that cholesterol pill. and speaking of cholesterol, brian, a big miss for two fast food giants. what's the deal here? are people trading up to upscale fare or are we basically losing our appetite for eating out? "street signs" is back after the break. customer erin swenson bought from us online today.
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this could be a big boom for the statin makers like pfizer, astrazeneca and merck. imagine finding out that your attorney took out a loan in your name and never told you about it. that's exactly what disgraced former attorney mark dreier did. on the documentary tonight "unraveled" you'll hear how he did it. >> i had set up one of these phony e-mails accounts and apparently, if somebody sent the message to that account, it would actually come to me so i'd be able to deal with it. but the guy from the fund evidently punched in the e-mail address with one wrong letter so it bounced back to him. so i guess then he called the office directly to say is there another e-mail address he could use. if he never punched it in with the wrong letter, this never would have happened this person called me and said we think this whole thing is a fraud.
i said here's your money back. i had gone from $100 million two weeks earlier to having not only nothing but having had to invade an escrow account of a client for about $40 million. >> scott cohn is with us now. i believe you have covered him for quite some time. you've seen this documentary. it feels incredibly candid. what's your take-away? >> we always try to get into the heads of these white collar criminals. they did with this one. mark simon who worked for mark d dreier. he was with him from the time of his arrest, to the time he was sentenced. he says he's repentant but he still has the ego. if it hadn't been for that one little e-mail error, he might still be doing the fraud. >> in other words, he knew he was doing wrong but he didn't feel bad about it? >> no. he was so caught up in himself and his firm he had built up in his name and this was his
identity. that's what fuels them. it is not so much the riches, it is the ego, the gradification, the adulation. >> you think about what he did. i can't say what i'm thinking on a national family program what he had to do what did he to go into a client's boardroom, start selling what? bonds? effectively in the client's name? >> he basically took his client's -- >> like somebody came in here and sat on set that didn't work for cnbc and started -- actually ratings would go up. >> i actually don't even work here. >> it's no different than garden va ri variety credit card theft. he took the owner, used his credit rating to raise money for his law firm because he couldn't get credit on his own. >> we absolutely have to watch it. do not miss, guys, "unraveled." that's premiering tonight at 9:00 p.m. eastern right here on cnbc. break out your french press because it is coffee talk time. coming up with uncle herb, his
take on green mountain getting all fancy. and the grinch who stole thanksgiving? how one super store could end the holiday as we all know it. and we give you the one thing you will not be thankful for this turkey day. here's today's return on retirement. getting ready to relocate so you can kick back and enjoy your golden years? here are the best states to retire to in 2012. according to moneyrates.com. economic conditions, senior population growth, and life expectancy were among the top factors used in the rankings. so which states are at the bottom of the list? we'll tell you when we return. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy.
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michigan came in at the bottom. ranking particularly low on climate and economic factors. for more on retirement, go to retirement.cnbc.com. we know you love it so we bring it to you every single day. street talk time with bank of america at the top of the list. bouncing back a bit after yesterday's sell-off. >> it is up 2.5%. here's why. isi upgrading it to a buy. they raised their one-year target to $18 from $12. my friends, that is almost a double from here. three reasons for the upgrade. one, capital ratios built back up. two, they believe cost savings will be realized. three, they think b of a getting their arms and everything else -- lawyers perhaps -- around the mortgage buyback risk. >> how is it always the lawyers win no matter the situation? qualcomm is also looking good on earnings and other news. >> absolutely. ets came in 7 cents above estimates.
sales also better. more importantly, guidance was better than expected. the ceo also calming investors about a possible shortage of chips for the iphone. their chips are in the iphone. let's talk rim. >> here's the story on rim. all right? they announced at the blackberry 10 -- which we haven't seen yet. but the blackberry 10 is now phipps 140-2 certified. i don't know what it means but apparently government agencies are now able to use it. it is a technical classification for security. good news? stock is a little bit higher today -- or it was. now it is down about 1%. question will anybody use it, including the government. but now the government can, if it wants. >> they are able to. let's bring in herb. hello, old friend. we want to talk coffee talk. >> you want to talk coffee? >> green mountain. coff coffee. your buddies are getting all hot and bothered in the fancy coffee side of the business now. lathe.
>> i was waiting for you to say that this time, not me. they are coming out with a new money, priced at about $219 or so. this is a very crowded space now. you have an espresso over here which is nestle, starbucks is in the middle. keurig and green mountain. i'm curious -- the difference is this is a fresh milk machine. if you you want to make your lattes. the starbucks machine is a milk pod. espresso has a neat way to froth milk. >> we're imagining these. what about green mountain as a stock? does it even matter? >> the issue with green mountain that i think really matters here and it is something i've been talking about throughout the day is the battle they will now have with starbucks. >> but back up for a second. >> they don't care! stock is down 1.5%. >> key kind of glossed over
this. you mentioned the milk. personally as a big drinker of coffee -- i love all of these kinds of machines -- the milk is the most important. the coffee is a much of a much, but fresh milk makes all the difference. is that going to be the thing that makes them stand out? >> no, remember, you're going up against a less expensive machine. can you get a less expensive machine from espresso. there are comparisons here. >> herb, aren't all espresso machines single serve? just a regular espresso machine? boom -- >> no. >> what do you mean? >> the one i have at home i have to grind the beans, i put it in, it is a single boiler, it is a serious deal. >> but it makes one cup. >> one cup and grind -- absolutely. >> it is a single serve. >> obviously much better tasting than any of this. >> yours is $1,000 and this is -- >> more than that. >> yours was more than that? >> $2,000? how much is that cup of coffee, per cup? i'm coming other to your house,
buddy. >> high roller. >> i bought this years ago. >> you clearly don't east fast food but here we go. wendy's stock up just a little bit here. even though it missed earnings estimates. it did double its dividend. mcdonald's though down. one of the biggest drags on the dow. it reported lower october sales that were below estimates for most regions of the world. let's talk more about this with jeff bernstein. he is senior analyst at barclays. all right, jeffrey. is fast food dying a slow death? or is this just a temporary blip? >> i'd say the broader category, weather fast food or casual dining has been struggling lately. the consumer is pulling back. even when they go out to eat they are spending less so people are looking for value impacting all of our restaurants. >> why have you got an overweight on mshgcdonald's and wendy's if you say that?
>> that's the challenge we face. we have to pick stocks within there better positioned to outperform. quick service says mcdonald's is a strong recovery trade after meaningfully underperforming in 2012. >> jeff, when you look at mcdonald's, that's really been struggling for several quarters. i want to go back and look at three quarters ago when they extended the store hours in europe. that seemed to be the last gasp of really trying to get something and juice the company for something more that's beyond the regular business. what do you think about that? >> well, that's been an initiative of theirs and others for a while. once you have your core lunch and dinner date part, it is what you can do to add hours. we've seen that across the board. >> when you can't add more hours what do you do? what happens to the growth? >> once you have run out of hours, the day is only 24 hours long. then it is driving more people into your stores on peak and off-peak periods which mcdonald's has been very strong at doing with their snacks and beverage platform. >> you love brinker
international, the parent company of chile's. are people going from fast food up to chili's or just going somewhere else -- like home? >> we don't believe too many people are necessarily trading up from quick service to somebody like a chili's. the reason why we like brinker here, for the past few years it's been a struggle for them from a comp and margin perspective. now comps are lapping those numbers and the margin student is still significant. again the broader category remains challenged. don't want to make it seem otherwise. >> why do you like buffalo wild wings as well? >> well buffalo wild wings is our preferred growth name in the category. they're doing north of 10% annual and new store growth and they're putting up very strong same-store sales trends. after battling with significant chicken wing inflation in 2012 we're finally going to lap that next year. we think for a growth investor buffalo wild wings is looking pretty good. >> stock is down 15% in one
month. what's happened? >> well, over the past few weeks most of our restaurants have reported earnings and it has not been a pretty quarter for the broader category. buffalo wild wings noted sales trends had slowed through the first few weeks of october. they often tell you what they're doing the first few weeks and that's not really the best indication of how a business is doing long term. >> let me jump in for a second. they had a little bit of a debacle with calorie counts. they posted it before the law in california and some other states. they pulled back. do you think that was a reason why sales slipped or is it just a bigger trend? that was temporary because the counts are now off the menu. >> most of our restaurants are testing that in different markets. buffalo wild wings in the most recent quarter did a 6% comp. that was among the leaders in our industry. when they tell but week to week type numbers they tend to be volatile. the first two weeks of october were disappointing. >> we got to leave it there, jeffrey. personally i hate those calorie counters. it just puts me off my food. bertha coombs has a quick
"market flash." >> mandy, we are looking at utilities. they are the worst performers in the s&p year to date in terms of the worst performers month to date as well. certainly as they struggle with hurricane sandy. but today they're the sector -- only sector that's trading to the upside. with that price having come down, that yield is getting that much richer on these dividend payers. a lot of them in the 5% range. exelon actually up about 6.5%. not bad if you're looking for that income. >> thank you very much, bertha. we've been talking about mcdonald's, wendy's, buffalo wild wings. i've got the munchies, guys. why don't we talk pot? legal pot? coming up next, we'll debate the politics and the profits now that recreational marijuana is legal in two states. will it solve the debt problem? the real rocky mountain high coming up.
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i'm bill griffeth. coming up on "closing bell," black friday shopping starting even earlier this year. walmart stores opening at 8:00 p.m. thanksgiving night. who's going to watch football? whether they'll cash in on the christmas creep this year. the ultimate market bear. one of our guests is warning the
dow could plunge all the way back to 6,000 by 2015. we'll get his reasoning on that. after the bell, disney is set to release its latest earnings report. the ceo breaks down the numbers for us even before he speaks to analysts. as always, maria and i look forward to seeing you at the top of the hour from here at the new york stock exchange. see you then. unless you were under a rock or maybe just too high to watch the news, you know by now colorado and washington become the first states to legalize the possession and sale of marijuana for recreational use. you could debate the morality of the issue all you want. but the money it could bring to cash strapped states. >> they say this is north after $300 billion business. you take the u.s. as at least a third of that, and you take colorado through their 500-plus medical marijuana facilities already in place. they've been taxing and regulating this for a few years now. the expectation is that with
full legalization through the taxes, it could mean $40 million a year going right into their school systems. quickly want to recap what actually passed. in washington and colorado, they're both essentially the same. in colorado you got to be older than 21. you can possess an ounce of marijuana. that includes out of state residents. you can't take it with you though. local governments can still ban commercial sales in businesses can still say employees cannot smoke. they can still make those rules at the microlevel. the major difference between the two states is in colorado people can also grow limited amounts on their own. you doont thcan't do that in wa. you're not supposed to smoke it in public. we'll see about enforcement on that. can you imagine getting busted for smoking pot in public when it is legal to smoke pot? enforcement is the biggest wrinkle -- marijuana use remains against federal law. we have no idea how the feds are going to react to this. i have to share this with you because it is hysterical. this is a statement that came from the governor of colorado.
"this will be a complicated process but we intend to follow through. that said, federal law still says marijuana is an illegal drug so don't break out the cheetohs or goldfish too quickly." >> goldfish? >> this is a governor in an official statement. that's hysterical! >> go yum! brands! our dads had the two martini lunch, our kids are going to have a two bong-hit lunch. >> what's a bong? one of the supporters for legalizing recreational use of marijuana in colorado is here. we've now got three brians on the show. maybe one brian too many. i want to ask you, this on the surface of things, more money, less policing, i would imagine more jobs, what's not to like? >> absolutely. people of colorado have soundly rejected the failed policy of
marijuana prohibition and taking a positive step towards a more fiscally responsible marijuana policy for our state. we'll bring in $60 million a year in new tax revenue, taking marijuana off the street corners, putting it behind the counter and only selling it to people 21 and older. >> which states are going to be next? >> i think we could see california and massachusetts in the next couple years. >> here's a question. brian, if you don't know who he is, he did a tremendous amount of work lobbying for this to happen. what do you think the feds are going to do, is the real key question. >> our hope is the federal government realizes they have better things do with their time an overturn being the will of colorado and washington voters. our voters have spoken loudly on this. how we spend our tax dollars in our state and how we fill our prison cells should be up to the voters of our state. marijuana prohibition has failed and we're moving forward with more sensible policy. >> brian, the local policies here, do you expect a lot of towns and counties in regional
areas to ban it? >> i believe that some towns may choose to ban it and not allow these stores. it is kind of like with alcohol. have you some dry counties, some wet counties. but what we found with medical marijuana in our state is the communities that have actually regulated medical marijuana and have the store fronts have brought in a lot of tax revenue, have created living wage jobs for their community members an they haven't had any serious community criminal risks at all. it's been a positive regulatory experience for medical marijuana and we think it can be a positive regulatory experience for broader adult use. >> how can you going to regulate the cultivation of marijuana though, brian? i imagine a lots of people will think, goodie, i'll make extra cash growing marijuana out in the back. >> well, colorado's department of revenue already oversees and regulates about 1,000 commercial medical marijuana growers currently. all those growers are licensed by the state and local government and there's strict oversight over those groves. we fully expect the department of revenue to have strict
standards in place to prevents any sort of redistribution from occurring. >> okay. >> brian? thank you very much. good luck. brian schactman, thank you very much. brian sullivan, thank you as well. wait a minute. don't look now -- christmas is right around the corner. but is the holy grail of holdy shopping lost? >> we need to get through thanksgiving first, folks. there's been a lot of talk this campaign about big bird. well, how much does it cost to stuff this big bird? the price of thanks giving when we come back.
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yeah, it's christmas all over again. is it that time again? there are only 46 shopping days left until christmas. start panicking. only 15 days until black friday. >> get this. walmart says it's going to begin its black friday deals apparently on turkey thursday. at 8:00 p.m. on thanksgiving night walmart will be open. apparently i'm supposed to look at another camera. did walmart just kill black
friday and in the process kill thanksgiving too? a lot of people waving and flagging. what am i supposed to do? everything all right? let's bring in stacy and jan. stacy, we were just chatting. he says it's not a big story. for me, it's like, is anything sacred anymore? is this the death of black friday? >> well, you know, we might as well just cancel it in advance for next year. every year it's getting earlier. last year it was 10:00. now walmart is opening at 8:00. most retailers are opening at midnight. there's good news. there's a special on a coffee maker at walmart for under $10 at 8:00. you're going to need it to stay up all night and get those bargains. >> i don't know why this is such a big deal. i apologize, brian sullivan. i know you say it is. a lot of companies have been doing this for many, many years.
>> it's not a big deal that they're doing this particular thing, opening another couple hours earlier. it's a big deal we've completely changed black friday. i mean, are we happy about it? do we make a lot more money? do we get more sales? the truth is we don't get a lot more sales per hour. we don't make a lot more money per hour. we suck sales out of december into black friday. i personally don't think the retailers are that happy with it. i know the sales associates aren't. they have to come in sober at midnight or earlier on thanksgiving to work. i'm not sure the shoppers are so thrilled. you can get a deal at 3:00 in the morning? sure, that's fun. i'm not sure black friday has improved by everybody opening at midnight. >> stacy, what's your take? i guess i'm an outlaw here thinking everything should be a little sacred. will it help sales? will they sell more? >> well, i think the early bird gets the worm here. walmart is opening earlier
because we know it's the environment that's very competitive this year. if they open at 8:00 and their competitors open at midnight, maybe they steal a little share. 10% of holiday sales happen on black friday. does starting early create incremental sales in the business? no, absolutely not. it pulls sales forward. last year if you looked at the numbers, a lot of retailers complained about the first half of december because that's exactly what happened. >> do you feel there will be other retailers that will follow walmart's example? >> i think the problem is that walmart sets the tone. you really have to chase them. i would not be surprised to hear more retailers would pile on and say, okay, we're going to open, 8:00, 9:00. we'll have some door busters. you know, kohl's came out today said they were sticking with midnight. other retailers have announced midnight. maybe this is a game changer. they really have bulked up.
>> it's capitalism. there's no choice. walmart opens, you have to open or you lose share. doesn't mean it's good. just means it makes it more competitive. it's harder to make a buck. we do more sales, but we don't do more sales for the whole season. expenses go up. associates are unhappy. you still have to did it. >> it's going to render black friday as the official start of the holiday shopping season. completely meani iningless then. >> it's even better. we have a 48-hour black friday. >> you're doomed anyway. didn't you ban it last year? >> i hate the word. cyber monday sevis even worse. >> let's ban christmas as well. >> how is the holiday shopping season going to be? >> it's going to be good. it's going to be 4, 4.5%. we're going to see real strength at the lower end. that may not be true in 2013, but it's going to be a good finish to a year to start a real tough year.
>> stacy, you agree? good season? >> well, i would agree with jan. also, i would add that inventories are extremely lean right now. that's good for gross margins. if retailers do feel the need to panic in december, margins won't be as bad as last year because inventories were too bloated. we didn't have a winter last year. you got a blast of snow. it starts things off early. sure, there's noise with sandy. with inventories the way they are, we're off to a good start. >> we have a window today. stacy, thank you. thank you, jan. whether you think retailers are killing the spirit of thanksgiving or not, there's one thing for certain. it's going to cost a whole lot more this year. jane wells sets the table for us. >> first, the good news. after a double-digit jump last year, this year the american farm bureau says the cost of a thanksgiving dinner for ten is up less than 1% to $49.48. a rise of only 28 cents. most items are a little cheaper this year than they were a year ago.
stuffing, sweet potatoes, milk, cranberries. the big jump is in the big bird. the average 16-pound turkey will gobble up more than $22. that's up 66 cents. turkey demand is up and prices are higher because it costs more to feed the bird. you recall the midwest drought this summer. the average price it costs the country for this dinner will be a smidge higher than a year ago. $49.48 is the highest ever overall cost for thanksgiving since the farm bureau started monitoring prices. by the way, back in '86, this dinner only cost about $29. but $29 then is equivalent to $60 now. in essence, you're payingless now than you did a quarter century ago. that's something to be thankful for. >> we are thankful. >> jane, thank you. so how would you like to lose those thanksgiving pounds? >> believe it or not, soda could help. we'll explain that next.
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pepsi giving a whole new meaning to diet soda. the new pepsi special has an ingredient that makes it hard to absorb fat. it goes on sale only in japan next week. japan, by the way, has one of the lowest obesity rates in the world. maybe they need to ship some pepsi special over here. >> all right. well, thank you for watching "street signs," everybody. >> "closing bell" is next. see you tomorrow, same time.